President Trump’s claim that China is controlling the Panama Canal has placed a Hong Kong -Tycoon and his conglomerate in the heart of a showdown between US and China.

The spreading company, CK Hutchison Holdings, is one of Hong Kong’s most valuable listed companies and counts some of the world’s largest investors as shareholders. One of its subsidiaries, Hutchison Ports, has been involved in the Panama Canal since 1997.

Of Panama’s five ports, Hutchisons are the largest – one at each end of the canal. According to the Panama Maritime Authority, Hutchison served last year vessels with 39 percent of cargo containers passing through the canal, one of the world’s most important waterways. (The other ports are owned by a Taiwanese company, a Singaporan company and an American-Panaman joint venture.)

The company’s role gives the surface unresolved issues for Washington about Beijing’s influence over Hong Kong, a special administrative region in China, which has become more pronounced in recent years. The Trump administration claims that China could use its influence over a Hong Kong company to force Panama to limit US trade in the port.

What is CK Hutchison, and who is this Tycon?

The billionaire Founder of CK Hutchison, Li Ka-shing, is a legend in Hong Kong. A high school, Mr. Li, now 96, turned a small company that sells plastic flowers into an empire that extends over infrastructure, finance, retail and telecommunications.

Hutchison Ports, a subsidiary of CK Hutchison whose warehouse is listed in Singapore, operates Balboa and Cristóbal ports on Pacific and the Atlantic of the Panama Canal. The company employs 30,000 people and operates 53 ends up in two dozen countries. Its largest shareholders are Blackrock and Vanguard, two of the world’s largest asset managers.

For decades until he retired in 2018, Li ran his business in a way that Chinese companies could not, which exploits Hong Kong’s free market and various laws. Like other Hong Kong entrepreneurs, Li Li grew the bands with China’s top leader in Beijing and invested in China.

But in recent years, Li has sometimes talked about China’s increasing grip on Hong Kong. In 2019, when pro-democratic protests met with the police force and Beijing looked at the city’s elites to fall in line, Li urged the authorities to exercise restraint.

Since then, Li has sold much of his property holdings in China and swung some of his investments to Europe, a feature that has made Chinese nationalists angrily.

What do Hutchison ports do on the Panama Canal?

Hutchison has been operating Balboa and Cristóbal ends up since 1997, when Panama granted it a 25-year concession. It is the only port operator where the Panaman government is a shareholder and receives payments for container movements through the channel and the dividend.

But Hutchison’s concession to operate its ports, which were renewed in another 25 years 2021, is now questioned.

Panaman authorities have promised to conduct an audit to verify that Hutchison correctly reports its income, payments and contributions to the state. ” On January 21, almost a dozen auditors entered the company’s office to start their work.

In addition, two lawyers in Panama submitted a mood this week questioned the country’s contract with Hutchison and said it violated Panama’s constitution. The Chinese government said on Wednesday that it “believes that Panama’s government will provide a fair environment for companies including those from Hong Kong.”

Hutchison Ports and its parent, CK Hutchison, did not respond to repeated requests for comment.

If CK Hutchison is in Hong Kong, why is it called Chinese?

It has to do with the unusual status that Hong Kong and its old companies like CK Hutchison.

Hong Kong was ruled by Britain for a century and a half before it returned to China in 1997. Beijing promised it would let the city work with “a high degree of autonomy.” It changed in 2020 when Beijing introduced a national security law on Hong Kong after pro-democracy protests erupted in the city.

Beijing’s narrow control over Hong Kong has sniffed political opposition. Much of what made Hong Kong different from China, as a lively citizen society and companies that could work independently, has been eroded.

Trump signed Trump during his first mandate an executive order that revoked a special designation under US law that enabled the United States to treat Hong Kong differently than China on issues of immigration and trade. During his term of office, President Joseph R. Biden expanded Jr. the executive order.

Meanwhile, the authorities of Hong Kong have taken measures to signal their loyalty to Beijing.

“Everything must be ‘Hong Kong, China,” said David Webb, a long -term Hong Kong investor. “It’s not really surprising that Hong Kong companies are then considered Chinese.”

What is China’s commitment to Panama?

The Trump administration’s concern about China’s influence in Panama is part of broader concerns for China’s belt and road initiatives, a program that has funded and built infrastructure projects around the world. In 2017, Panama became the first Latin American country to join a belt and road.

After a visit this week by Marco Rubio, the US Secretary of State, President José Raúl Mulino from Panama said he would not renew the belt and the road agreement. But Beijing has already scaled back his lending all over the world.

Panama has received $ 669.7 million from grants and loan commitments from China, about half as much as its neighbor Costa Rica, according to Aiddata, a research project at William & Mary in Williamsburg, VA. The largest Chinese funding in Panama was $ 200 million loan commitment in 2019 from the state export import bank in China to a privately owned Panaman bank.

China planned to do more for Panama after a visit by its top leader, Xi Jinping, 2018. But Panama’s president who had led a slope against Beijing, Juan Carlos Varela, left the office in 2019.

Mary Triny Zea Contributions Reporting from Panama City, Annie Correal from Mexico City and Zixu Wang From Hong Kong.